Tax Collector

Understanding How Taxes are Calculated

The mil rate (or millage rate) is a key component in calculating your property taxes. It represents the amount of tax per $1,000 of your property’s assessed value.

Here is a breakdown of how the mil rate directly affects your personal and property taxes:
The taxes are calculated using a simple formula:

(Tax = (Assessed Property Value/1,000) times Mil Rate)

Assessed Property Value: The value the town or city has placed on your property for taxation purposes, which may be different from the market value.

Mil Rate: The tax rate expressed in “mills” (a mill is one-thousandth of a dollar, or ($0.001).

How the Mil Rate Impacts the Total Bill Direct Proportionality: The higher a town’s mil rate, the higher your tax bill will be, assuming your property’s assessed value remains constant.

Funding Local Services: The mil rate is set by the local government to raise the revenue needed to fund public services like schools, libraries, police and fire departments, road maintenance, and local administration. If a town needs more revenue to cover rising costs or new projects, it may increase the mil rate.

Factors Beyond the Mil Rate

It is important to remember that changes in your tax bill are not solely dependent on the mil rate. Your property’s assessed value is an equally important variable. A town might lower its mil rate, but if a recent reassessment increased your property’s value significantly, your overall tax bill could still rise. Conversely, if property values across the town fall, the town might have to increase the mil rate to generate the same amount of total revenue required for the town budget.